Lodwick v London Borough Of Southwark

An allegation of apparent bias raises a question of law within the Employment Appeal Tribunal’s jurisdiction unless it is so lacking in substance that it presents no real challenge to the tribunal’s decision. The governing question is whether a fair-minded and informed observer would conclude that there was a real possibility of bias. Apparent bias in a legally qualified tribunal chair is not cured merely because two lay members have equal votes.

Previous adverse judicial comments about a party, witness or representative do not ordinarily require recusal without some additional circumstance. Employment Tribunal costs remain exceptional and compensatory. A substantial costs order must identify clearly the conduct justifying it and the basis on which its amount was assessed.

The appellant’s claims for unfair dismissal and breach of contract were dismissed by an Employment Tribunal. At the outset, he had unsuccessfully requested that the chairman recuse himself because the chairman had criticised his conduct as a representative in earlier proceedings involving the same employer. The Tribunal later ordered the appellant to pay £4,000 towards the employer’s costs because his conduct had considerably extended the hearing.

The Employment Appeal Tribunal, acting under Rule 3(10) of the Employment Appeal Tribunal Rules 1993, held that it lacked jurisdiction because the proposed appeal disclosed no arguable error of law. The appellant challenged that conclusion and the costs order. The central questions were whether the apparent-bias allegation raised a question of law which the Employment Appeal Tribunal should determine and whether the Tribunal had exercised its costs discretion correctly.

1. Appeal allowed. Pill LJ delivered the judgment, with which Latham LJ and Eady J agreed. The allegation of apparent bias raised a question of law under section 21 of the Employment Tribunals Act 1996. It was not so flawed or insubstantial that the Employment Appeal Tribunal could decline jurisdiction. The reasons given for refusing recusal themselves raised a legal question about the correct test.

2. The applicable test, derived from Porter v Magill [2002] 2 AC 357, asks whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility of bias. The Employment Appeal Tribunal had to examine both the original recusal decision and the proceedings as a whole. Because the Court of Appeal lacked a record of what had been said when recusal was refused, it would be unfair to decide the bias issue itself. The matter was remitted so that evidence and comments could be obtained under paragraph 11 of the relevant Practice Direction.

3. The fact that the chairman was one of three members, each with an equal vote, was not a good reason for refusing recusal. The legally qualified presiding member held an important position. If the applicable observer would perceive a real possibility of bias in the chairman, the presence of two lay members could not satisfy the requirement of a fair hearing.

4. Consistently with Locabail (UK) Ltd v Bayfield Properties Ltd [2000] IRLR 96, earlier adverse comments about a party, witness or representative do not ordinarily establish apparent bias without more. Each situation requires specific consideration, but parties cannot normally obtain a different judge merely because adverse findings or comments were made in earlier proceedings. Circumstances requiring recusal on this basis are likely to be rare.

5. The £4,000 costs order was quashed. Costs under Rule 14 of Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2001 are exceptional and compensatory rather than punitive. The Tribunal had neither found that the proceedings were misconceived nor quantified how far the appellant’s conduct extended the hearing. A substantial order required a clear statement of its reason and basis. Although tribunals possess a broad costs discretion, that discretion had not been exercised correctly here.

• Court of Appeal (Civil Division): Allowed the appeal, held that the Employment Appeal Tribunal had jurisdiction, remitted the apparent-bias issue for determination and quashed the £4,000 costs order.
• Employment Appeal Tribunal: Held under Rule 3(10) of the Employment Appeal Tribunal Rules 1993 that it had no jurisdiction because the proposed appeal disclosed no arguable error of law.
• Employment Tribunal: Refused the chairman’s recusal, dismissed the substantive employment claims and ordered the appellant to pay £4,000 towards the respondent’s costs. A Regional Chairman subsequently rejected the appellant’s review application.